Running head: MARKS & SPENCER 1

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MARKS & SPENCER 2

Table of Contents
Introduction ......................................................................................................................... 3
TOWS Analysis ..................................................................................................................... 5
Situation Analysis ............................................................................................................... 5
Threats ............................................................................................................................................ 5
Opportunities ................................................................................................................................ 5
Weaknesses ................................................................................................................................... 7
Strengths ......................................................................................................................................... 7
Strategic Analysis ............................................................................................................... 8
Two Strategies ..................................................................................................................... 9
Market Development .................................................................................................................. 9
Differentiation .............................................................................................................................. 9
SFA Model .............................................................................................................................. 9
Strategy Recommended ................................................................................................ 10
Canvas Strategy ................................................................................................................ 11
Market Development Strategy Implementation for M&S............................................11
Conclusion .......................................................................................................................... 14
References .......................................................................................................................... 15
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Introduction

Mark & Spencer is a retail brand, based in the UK, and offers various kinds of

food, clothing and financial services. Michael Marks has started this business from a

small market stall in Leeds, in 1884, and build a strong commitment to quality, value,

and service (M&S, 2018). In 1894, Marks made a partnership with Tom Spencer.

Their stall in Leeds was then converted into a covered arcade, and a headquarter was

established in Manchester. In 1930, both Michael Mark and Tom Spencer found a

store in London, Marble Arch which was Mark & Spencer. A year later, the food

section was also found. The firm then entered into the category of ‘convenience food'

by using its ice cream counters for the sale of sandwiches. Over the decades, the firm

has enormously extended its range of readily available meals with the inclusion of

global dishes like chicken Kiev, introduced in 1979, and Rogan Josh, launched in

1974 (M&S, 2018). Currently, M&S still operates in a market stall located in

Grainger Market.

In 1916, M&S got a new chairman named Simon Marks. M&S became a

public corporation in 1926, and it has started selling textile products. In 1931, the

company launched its sales of canned and produces goods. In 1946, Israel Sieff

became the chairman of the company on the death of Simon Marks. He began

continental food and wine for the customers. The firm started its online operations in

1999 with the launch of its website. Currently, Stuart Rose is the Chief Executive of

the firm. The firm has 600 stores in England and 240 outlets in other parts of the

world. M&S has generated more than £8 billion of annual sales and its number of

employees for the year 2015-16 is 67000 among which 65000 were employed in
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England (PN Staff, 2017). Currently, M&S product range covers almost everything

from kid clothes to fresh food. It is mostly referred to as one of the largest retail

business of high street.

The paper evaluates TOWS analysis of Marks & Spencer UK. The evaluation

of strengths, weaknesses, opportunities, and threats helped to carry out a strategic

analysis of the company

Running head: MARKS & SPENCER 5

TOWS Analysis

Threats Opportunities

 Increased Competition  Internalization-Increasing the

 Declining customer base Global Presence

 Market Expansion

 Growth Opportunity

 Market Segmentation

Weaknesses Strengths

 Falling Food Sales  High Brand Recognition

 Manual Operations Resulting in  Huge Range of Products

Cost Increase  Large Chain of Outlets and Stores

Situation Analysis

Threats
Due to high-level competition, Mark & Spencer, is facing a threat of losing its

business scope. In the retail sector, increasing competition can create so many

problems. Mark & Spencer's competitors like Sainsbury, Asda and Tesco are

extending their businesses, an example of which could be the establishment of Tesco

Express and Sainsbury’s local while Mark & Spencer is still relying on its super

stores (M&S, 2018). If Mark & Spencer does not change its strategy, it may face the

threat of losing its customers.

Opportunities

1. Internalization-Increasing the Global Presence

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Initially, domestic factors were responsible for the internalization strategy of the

firm. But after the circumstances changed dramatically, it became clear that the firm

can only extend its business through expansion in foreign markets (Evans, 2018). The

leading Labor party was proposing the nationalization for the giant retailers of the

domestic market. Thus internationalization was considered a way to divert all the

things form the market on the local level. The firm has started exporting most of its

services through the brand called St. Michael (Evans, 2018).

2. Market Expansion

By the year 1996, the firm has established 645 stores globally, whose 58%

shares were in England, Canada, and Europe. The firm can use different kinds of

methods to enter an overseas market. Mark & Spencer can establish its outlets in

different countries or can extend the business through franchising strategy (M&S,

2018). The brand has established its outlets in France, Canada, Germany, Belgium,

Ireland, Hong Kong, Netherlands and Spain (M&S, 2018). It has also created

Franchise agreements with countries like Czech Republic, Bahamas, Canary Islands,

Bermuda, and Israel. The firm has also decided to open its franchises in the low per

capita income countries.

3. Growth Opportunity

Mark & Spencer has also agreed with Planet Sport which provides the firm an

opportunity for global growth. When the firm operates globally, its chances of overall

growth will increase automatically (M&S, 2018). The firm should create and execute

a particular strategy for the opening of outlets in most countries of the world.

4. Market Segmentation

Mark & Spencer have established mega stores in many locations, but the firm has

not segmented its market based on the various categories of customers. One of its
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competitors, Sainsbury, has divided its customer base and open the targeted stores

like Sainsbury Local’s which enhance the sales of the business. Similarly, Mark &

Spencer can avail the opportunity of dividing the customers based on their area of

interest and opening of small outlets (M&S, 2018). It will decrease the firm’s cost of

maintenance and increase its revenues, as small stores require less manual power than

megastores.

Weaknesses

1. Falling Food Sales

The firm is facing falling food sales that were reported to be down by 2.2% as

reported by the end of September. The company also reported that the remaining

financial year would also be challenging for M&S. However, the company is striving

to enhance its sales trajectory (BBC News, 2018).

2. Manual Operations Results in Cost Increase

In today’s world, big businesses are prioritizing the use of both automated and

mechanized techniques of material management for a variety of operations related to

logistics. Through these techniques, the firms can quickly improve their productivity.

In the case of Mark & Spencer, it is not using the technology to replace the manual

work thus compromising its efficiency and increasing its costs (Evans, 2018).

Strengths

1. High Brand Recognition

By providing consistently high-quality products, Mark & Spencer has earned a

high brand reputation among the high street customers (Davey, 2013). The brand is

leading the market and becomes the priority of the customers because it enables them

to complete their entire shopping under one roof.

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2. Huge Range of Products

Large range of products, offered by Mark & Spencer, provides the customers with

the flexibility to make the best choice. For instance, regarding vegetables and fruits,

the firm offers avocados, canary tomatoes, carrots, and English apples, etc. The

company has established a strong relationship with those suppliers who facilitate the

firm in enhancing its product variety. Currently, Mark & Spencer has greater than

1200 suppliers with more than 400 distinct varieties and also 500 different kinds of

salads, vegetables and pre-prepared fruits (M&S, 2018). As the firm’s competitors

remain unable to provide a variety of products to their customers, Mark & Spencer

take advantage of this weakness of its competitors.

3. Large Chain of Outlets and Stores

The firm has total 900 stores around the globe. It has a total of 600 stores in

England and more than 300 outlets in more than 40 states of the world. A large

network of stores with a variety of products increases the size of the business and

ultimately its sales (M&S, 2018). If the firm further extends its stores network, then it

could be able to fulfill the majority needs of its large customer base with the provision

of good quality products and lower prices.

Strategic Analysis

Strategy refers to the Plan, which leads the firm towards its ultimate destiny

(Grant 2010). The process of strategy development at Marks & Spencer can be

explained theoretically with the help of SFA Matrix. Consequently, innovative firms

always embrace change. Where Mark & Spencer is selling the products of its brand, it

ensures its commitment to high quality and consumer satisfaction. M&S is following

the market penetration strategy for so many years. The firm has set its business for the
MARKS & SPENCER 9

growth trend by entering into joint ventures with leading stores and vendors. Through

this strategy, the firm has extended its business geographically.

Two Strategies

Market Development
The management of M&S can expand their business by utilizing strategies of

market development through which they can extend their business to new states of the

world. The firm can leverage its strong brand equity, based on the provision of high-

quality products, to attract a huge customer base in new markets (Lynch, 2009). The

strong brand reputation can facilitate the firm to enter into new markets to increase its

share of market and customer base (Jackson, 2015). It is easy for the firm because it

offers high quality at lower prices. The firm can use this strategy for the growth of its

business, which will ultimately benefit the entire firm.

Differentiation
M&S can use relative diversification for its food business. The new food

products can be launched using horizontal diversification strategy after analyzing the

changes in consumer tastes and trend of the people. The firm can seek benefits

through this strategy and retain its position at the top of all retailers in the UK (Hill,

Jones, and Schilling, 2014). The products and services offered by the company have

high net worth thus; the firm can use the diversification strategy for the growth of its

business in international and local markets.

SFA Model

Market
Perspective / question Weighing Differentiation
Development
Suitability
Seizing opportunities and threats 4 5 4
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Minimize weakness and threats 4 4 2

Central problem solving 5 4 3
Score 56/65 39/65
Feasibility
Financial 4 4 2
Organizational 4 5 2
Economic 2 5 3
Technological 4 5 4
Social 2 4 4
Legal 3 2 1
Score 80/95 49/95
Acceptability
Risk 3 4 2
Score 12/15 6/15
Final scores 148/175=8.5 95=5.4

SFA model is used for choosing a strategic option for M&S. The option A

shows highest score with three factors that is, suitability, feasibility and acceptability.

Thus, the model shows that option A is mist suitable for the company offering more

opportunities and is also acceptable. As option A shows total score of 148 so it is

marked at 8.5 as compared to option B showing score of 5.4, so it is selected for

further implementation

Strategy Recommended

In the late 1930s, M&S has put great emphasis on the creation of new products

for the market of UK and started offering a variety of products and services. The BCG

matrix is used to bring a balance in the business portfolio regarding market growth

and market share (Pitt and Koufopoulos, 2012). For M&S, its rate of growth is slow,

and its share of the market is also declining. The retail industry of M&S is at its level

of maturity, and thus it has a stable growth trend so in this case, it is very difficult to

achieve more market share. It could be stated that M&S is an organization at its

declining stage. Competitors of M&S, which are in their growth phase, are trying to
MARKS & SPENCER 11

enhance their share of the market thus it is essential for M&S to make new

investments to regain its leading market position (Grünig and Morschett, 2017). It

could be achieved by offering lower prices than competitors and through heavy

marketing of the products. Based on the strategy clock model, M&S should adopt the

market development strategy to high expand its business.

Canvas Strategy

Market Development Strategy Implementation for M&S

The new plan is to be designed and executed for extension in new markets,

referred to as market development, to achieve strategic level growth for clothing line

of business. The implementation plan proposed for Marks & Spencer is based on

Canvas Business Model and follows the time period of 2019 to 2022. The company

must follow the plan to complete the implementation in the period of three years.

The firm should design and execute strategic plans to gain its market share in

various countries. It has extended its operation in many states of the world, and its

products are gaining huge acceptance and market share. By leveraging its huge

growth in global markets, it should now emphasize capturing different markets

through its high-quality products (Hill, Jones, and Schilling, 2014). New markets will

facilitate the international growth of its foo line of business and will further enhance

its brand equity. Following steps are involved in the planning of market development

strategies: planning, human resource, organizational structure, monitoring, annual

business plan, linkage, and control.

In the creation of market development strategies, planning is the first stage.

The company first has to determine the new market segment, which it will serve, and

the product line by which it will serve the new market (Osterwalder and Pigneur,
MARKS & SPENCER 12

2009). The firm should research to determine the tastes and preferences of its new

consumers and then launch its present and a new range of products accordingly.

Before the establishment of its business in the new market, the firm should

decide its organizational structure (Burns, 2016). Normally, when big firms open new

stores in new countries, they give franchising contracts to local people so that the risk

factor can be minimized and the management is performed by the franchise (Grünig

and Morschett, 2017). The franchiser firm can still control the sore layout and product

pricing. The franchise is responsible for all the HR related activities of new stores, but

M&S arranged different workshops for workers' training and support for the

acquisition of required capabilities and skills (Jones, Bown, Hillier and Comfort,

2017). In this way, M&S creates a workforce which can satisfy its consumers' needs

effectively.

To forecast the firm's sales in novel markets, an annual business plan is a

helpful tool. The franchiser firm and its franchisee have to allocate the budget as

decided in the annual business plan to generate growth trends (Scott and Walker,

2017). Monitoring and controlling is significantly important for the success of the

new business. M&S has to monitor the training of its workers for best customer

services. It has to monitor the product display in the new outlets. The firm has to

conduct surveys regularly to identify the new customer choices and then develop their

products and services accordingly (Scott and Walker, 2017). M&S has to ensure that

the franchise is strongly following the business ethics otherwise its brand reputation

will be damaged in the new markets. Linkage refers to the process through which the

firm maintains a strong check on all the business operations so that all the processes

can be executed in the pre-decided arrangement (Jackson et al., 2018).

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By using this strategy for growth, M&S can capture various new markets and

can extend its business to many global destinations. One of the major goals of M&S is

to achieve high growth thus growth through international markets is a profitable

option (Jackson, 2015). M&S has done a lot of efforts to capture market share from

local companies of the international markets, and thus its global turnover was raised

from £897.8million (2009) to £968.7 million (2010) (Islam, 2016). As M&S has

achieved enormous growth from its international market business, thus M&S should

utilize this plan to grow its business in novel markets further. Through this plan, the

firm can also introduce new product lines for its novel markets. M&S has already

established a strong brand image that could be leveraged for the new market

extension. Therefore, this growth strategy should be implemented by M&S to achieve

growth in new markets.

Monitoring and Evaluation

It is difficult to monitor and forecast to ensure that right decision are taken at

appropriate time regarding the ongoing business activities. For this, it is important to

determine the possible challenges, which the firm has to face so that the strategy

could be executed accurately in the firm. It provides a vivid picture of all the activities

at a specific point in time. To conduct proper monitoring and evaluation at a particular

time, it needs to be well managed and implemented. It calculates the efficiency and

efficacy of the required results of the strategic plan. Consumer responses, market

share, and market demand can be used to monitor and maintain the outcome of this.

Evaluation gives a detailed analysis of the success/failure of the implementation

program. Firm's performance can be examined by product demand, consumer

feedback, profit growth, and market share. To analyze market responsiveness, tools

like consumer interviews and focus group analysis can be used.

MARKS & SPENCER 14

Conclusion

Marks & Spencer has a strong global presence and has made remarkable

growth in the food industry of UK although M&S is facing issues in its clothing

business, so it needs to focus on food business to retain its presence in the market.

M&S is operating in a highly competitive market in the UK have high brand

recognition. The aspect that differentiates M&S from its competitors is the wide range

of products regarding vegetables and fruits; the firm offers avocados, canary

tomatoes, carrots, and English apples, etc. However, non-trendy stores make it less

attractive to the consumers, and manual operations are increasing the costs of

operations. M&S has the opportunity to extend its business globally. Market

development and differentiation are two strategies evaluated for M&S UK. The

strategies are analyzed using SFA Matrix, and market development strategy is

selected for the company. For successful implementation of the strategy, the company

must carry out the planning of market development strategies through planning,

human resource, organizational structure, monitoring, annual business plan, linkage,

and control.
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